Commentary

U.S. politics trumped pipeline and Canada concerns

BillMann

PORT TOWNSEND, Wash.(MarketWatch) — When a U.S. president is politically vulnerable, a columnist in Canada’s largest daily wrote this week, “Canadian concerns and Canadian prime ministers can be reduced to bugs on a windshield.” Ouch.

Tim Harper (no relation to Canadian Prime Minister Stephen Harper.) poured more salt in Canada’s wounds in his blunt-spoken Toronto Star piece, one that probably made more than a few Canadians wince:

“There are no votes in a U.S. election year for playing nice with Ottawa. Canada poses no threat, it tops no one’s to-do list in Washington, it cannot shout loud enough to be heard above the campaign din.”

No one ever said U.S. politics wasn’t ugly. (Remember that old line about Washington being “Hollywood for ugly people”?)

In newspapers and on talk shows across Canada this week following President Barack Obama’s decision to delay the $7 billion Keystone-XL pipeline that Prime Minister Harper had famously called a “no-brainer,” there’s been no shortage of Monday-morning quarterbacking and questions about what went wrong with the proposed project. (A brain freeze?) Plenty of Canadian media worthies are piping up, so to speak.

How did Canada and officials of Alberta-based TransCanada
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the pipeline’s builder, blow it so badly?

Canada’s Financial Post asked why a project that “was so desperately needed by both countries was sunk so spectacularly by a loosely organized, fact-challenged, emotion-driven posse of anti-oil protesters.”

OK, TransCanada’s media and political savvy (and Ottawa’s) need work. Lots of work. But even saying this, I didn’t enjoy the spectacle of Canada being jerked around again by triangulating American politics this past week. Events after the decision to delay the pipeline made this bug-on-the-windshield treatment even more painfully obvious.

Local politics

TransCanada announced within three days of the decision that it would re-route the pipeline around Nebraska’s Sand Hills aquifer. Following the once-inflexible Canadian company’s cave in and proving again that all politics is indeed local, Nebraska’s governor and two U.S. Senators quickly jumped on board, not only now supporting Keystone-XL, but asking Washington to “expedite” its approval.

Of course, as Canadian media remind us, this all-politics-is-local thing works both ways: Remember Harper’s government caving to local pressure to reject Aussie giant BHP Billiton’s
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huge bid to take over Saskatchewan-based Potash Corp.
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after that province’s premier and voters protested loudly?

TransCanada’s new batch of extra homework — to plan to reroute the pipeline about 30 miles around the aquifer — will take about six to nine months, analysts say. And even when that’s completed and handed in to the U.S. State Department, the pipeline won’t be approved until after the U.S. Presidential election in 2012, says David Wilkins, former U.S. ambassador to Canada. “Any way you shake it, it looks like the decision has been put off past the election, which I believe was the intention to start with,” said Wilkins, who’s now lobbying for TransCanada.

The Calgary-based pipeline company, columnist Harper noted in the Star, “forgot one of the oil sector’s own rules, that governments grant permits, but communities grant permission.”

As for those thousands — maybe up to 200,000 — pipeline jobs TransCanada and its supporters claimed would result if the pipeline to Texas were built? The unions obviously lost this round and Robert Redford, Bishop Desmond Tutu, Daryl Hannah and the environmentalists won this first big battle against exporting Canadian crude from the oil sands.

I’ve also wondered about the seemingly inflated pipeline-jobs figures being floated by TransCanada, unions, Fox News and other pro-pipeliners this past year.

Comedy Central’s preternaturally clever Stephen Colbert ran a 30-second “highlight reel” this week culled from U.S. cable news networks that illustrated some of the ever-escalating jobs figures being tossed about to job-hungry American viewers. Colbert ended by asking what would now happen to the “billions” of lost Keystone-XL jobs.

(He also did a hilarious joke about Canada and its huge oil reserves, showing a map of Canada and saying salaciously about America’s alluring, oil-rich neighbor, “I’d love to tap into THIS...” )

While TransCanada’s geologists, surveyors, and EPA-impact writers are busy with their homework in Nebraska, Canada still has an increasing supply of Alberta crude that needs a home. Will it be “stranded oil,” as some have suggested? Some reports say it could be shipped to Eastern Canada, which now imports some oil.

So the media spotlight now shifts north, where hearings over Enbridge’s proposed Gateway pipeline from Alberta to Kitimat, B.C. — where the crude can be easily shipped to Asia — are set to begin in January. Canadian officials are saying Gateway is Plan A, since Keystone won’t be permitted or started any time soon.

But some Canadian media reports are claiming that Ottawa’s talk about finding markets in Asia for tar sands if Keystone is ultimately rejected is just a bluff.

“The Northern Gateway project to take tar sands oil to the B.C. coast and then to Asia is dead before the environmental hearings even begin,” says Toronto Globe and Mail columnist Jeffrey Simpson, who adds this explanation to his eyebrow-raising claim:

“The route must traverse huge tracts of land claimed by aboriginals who, for a variety of reasons, don’t want a pipeline. Maybe they’re pigheaded. Maybe they don’t want to join modernity. Maybe they’ll change their minds. Quite probably, however, they won’t, and the great dream of a new route to Asia for the tar-sands oil will go the way of two failed efforts to bring natural gas down the Mackenzie Valley.”

(Note: A proposed natural-gas pipeline from the gas-rich Northwest Territories to British Columbia has been stalled by native groups for years).

Native/aboriginal groups in Canada have far more political clout than they do in the U.S.

Simpson’s list of “three levels of trouble” for tar-sands oil sums them up concisely:

First, of course, local opposition (like that in Nebraska). Also: The fact that tar-sands oil “is dirtier than conventional oil in the sense of emitting more greenhouse gas-causing carbon emissions.” The third? “Some people simply object to developing and using more fossil fuels from whatever source.”

I would add an important fourth problem: The “optics,” which usually dictate TV coverage: The oil/tar sands aren’t very pretty to look at. Not at all.

They might even make Colbert reconsider the object of his affections before “tapping into them.”

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